Much in linewith expectation, the Reserve Bank of India (RBI), in its First Bi-MonthlyMonetary Policy Statement, 2019-20, has cut the policy repo rate under theliquidity adjustment facility (LAF) ) by 25 basis points (bps) to 6.0% from6.25% earlier for the second time in a row, with retail inflation continuing toremain low. This is the lowest repo rate in about nine years since 2010.
The reverserepo rate under the LAF stands adjusted to 5.75%, and the marginal standingfacility (MSF) rate and the Bank Rate to 6.25%. The MPC also decided tomaintain the neutral monetary policy stance. On the growth front, the CentralBank has projected GDP growth at 7.2% for 2019-20 - in the range of 6.8-7.1% inH1:2019-20 and 7.3-7.4% in H2 - with risks evenly balanced.
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